New rules on the regulation of online platforms take effect

Online platform providers should take note of EU Regulation 2019/1150 on promoting fairness and transparency for business users of online intermediation services which came into force on 12 July 2020 in the UK and the EU. At the same time, the UK introduced the Online Intermediation Services for Business Users (Enforcement) Regulations 2020 which also took effect on 12 July 2020. The UK Regulations deal with the enforcement of EU Regulation 2019/1150.

Who do the new rules apply to?

The new rules apply to providers of online intermediation services (OISPs) and providers of online search engines (OSEPs) – although how they apply to OISPS and OSEPs differs.

Online intermediation services cover a wide range of business activities, including online marketplaces (such as Amazon, eBay and Booking.com), social media and creative content outlets (such as Facebook, LinkedIn and Twitter) and app distribution platforms (such as Apple App Store and Google Play). Online payment services, advertising tools or advertising exchanges, which are considered to be purely business-to-business services and do not facilitate direct transactions with consumers, are not caught.

OISPs and OSEPs are subject to the new rules if:

  • they provide / offer services to business users and corporate website users established / resident in an EU member state; and
  • those business users and corporate website users offer goods and services to consumers located in EU member states through the online intermediation service or online search engine.

Key features

1. Fair Terms and Conditions:

OISPs' terms and conditions must be clear and easily understandable and should, amongst other things:

  • detail the possible grounds for restricting, suspending or terminating services
  • provide 30 days’ notice and a detailed statement of the reasons for services being restricted or terminated
  • provide notification at least 15 days in advance of any variation of the platform’s terms and conditions (longer if the change requires the business user to make technical or commercial changes)
  • clearly specify whether the platform reserves any rights in relation to the business user’s intellectual property rights
2. Transparency:
  • OISPs must disclose the main parameters used to rank goods and services, the reasons for the relative importance of those main parameters and any possibilities for business users to influence ranking by remuneration and the effects of such remuneration on ranking
  • OSEPs must disclose the main parameters used to rank goods and services, the relative importance of those main parameters and any possibilities for corporate website users to influence ranking by remuneration and the effects of such remuneration
3. Complaint handling and dispute resolution:
  • All but the smallest of OISPs must provide an internal system for handling complaints and identify at least two mediators in their terms and conditions with which they are willing to engage to try and resolve disputes with business users
4. Enforcement
  • Business users can take action against platform providers in certain circumstances
  • Business associations, campaign groups and public bodies can also take action for non-compliance with the new rules

The rules form another piece of the legislative puzzle governing businesses online. OISPs should ensure that they update their terms and conditions and review their complaint handling procedures. Both OISPs and OSEPs will also need to ensure greater transparency with search result rankings and the treatment of their products in comparison to those of other business users.

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